Here’s Why People Don’t Save Enough

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In the United States and Singapore – places that emphasize self-reliance – many older workers and retirees admit that, if given a do-over, they would have saved more money over the past 20 or 30 years.

Regret was more common in the United States – 54 percent of older Americans had it versus 46 percent in Singapore, according to comparable surveys in each place. Perhaps the reason Singapore has less is because the government requires that employees set aside more than a third of their income in three government-run savings accounts for retirement, healthcare, and home purchases and other investments. On the other hand, Singapore doesn’t have Social Security or unemployment insurance, and private pensions are rare.

Whatever the differences, regret is a common sentiment in Singapore and the United States. What researchers wanted to know is: what is the source of that regret?

They tested two hypotheses. One is the human tendency to procrastinate and never get around to tasks that should be a priority. The other reason is largely outside of workers’ control: financial disruptions earlier in life that sabotage efforts to save, such as a layoff or large medical bill.

Employment problems, the researchers found, were a major source of saving regrets for 60- to 74-year-olds in both places but the impact was especially strong in the United States, which historically has had a more volatile labor market than Singapore. Disruptions that interfered with workers’ ability to save included bouts of unemployment and earning less than they were expecting. Early retirements and disabilities also led to saving regrets, as did unanticipated health problems and bad investments.

But procrastination as a reason for regret did not stand up to scrutiny. In this part of the survey, individuals agreed or disagreed with various statements designed to indicate whether they were procrastinators, including whether they work best under pressure or put off things they’re not good at.

The Americans and Singaporeans who were less inclined to prepare for the future had no more regrets about how much they’d saved than those with the willpower to follow through on their long-term commitments.

For most people, life’s unpleasant surprises – and not a tendency to procrastinate – seem to be a better explanation for why it is difficult to save.

To read this study, authored by Axel Börsch-Supan, Michael Hurd, and Susann Rohwedder, see “Saving Regret: Self-assessed Life-cycle Saving Behavior in the United States and Singapore.”

The research reported herein was derived in whole or in part from research activities performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium.  The opinions and conclusions expressed are solely those of the authors and do not represent the opinions or policy of SSA, any agency of the federal government, or Boston College.  Neither the United States Government nor any agency thereof, nor any of their employees, make any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report.  Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.

Chuck Miller

This confirms my thinking that the major reason for not saving is spotty employment and lack of money.


What’s that old saying? —> “failing to plan is planning to fail.” That planning is certainly impacted by procrastination, which then leads to being susceptible and unprepared for life’s disruptions, such as was mentioned – unemployment, low earnings, early retirement, bad investments, etc.

It’s all related and results in the accompanying regret.

Retirement Coffee Shop

A lot of time the lack of savings is due to neither of these issues. I know more than a few people who just disregard the notion of saving for the future. They have lived their lives like there is no tomorrow and spend money on any and everything they want. This results in a lack of savings at the time they need to retire.

    Paul Brustowicz

    Do you know my retired friends who continue to refinance their home to pay credit card debt every few years? They went through an inheritance like water over the dam. But they are the first to buy drinks at the bar.


My dad used to say that it is not the high cost of living that keeps people from saving and investing; it is the cost of living high.

John Perry, MD, MBA

Why do we not have mandatory classroom instruction on personal finance that is age appropriate in every single year of schooling in the USA? I began instructing my daughter at age 4, and continued on almost a daily basis during her raising. Parents and schools should take the lead. I cannot think of one government program that has been efficient, accomplished its goals, and not been in financial trouble.


    Maybe because there is no evidence that personal finance education makes any difference. Most people need coaching at a point in time that they also have earnings.

    For most, that is at one’s first “real job”.

Debi Street

It is not only unpleasant surprises over a working life that undermines savings. It is also the unpleasant quotidian reality of too many people in low wage, precarious jobs with no surplus to save. Many people, in both countries, never earn enough to have anything left over to save in the first place, once they pay for the necessities of life.

Marina Teramond

The reasons are trivial – lack of money and the desire to live “here and now.” In addition, many do not believe in the future of the pension system. So, many citizens do not see the point of saving for old age. The majority of the population simply doesn’t have the opportunity to save money for retirement, since prices for all goods and services are growing at an outstripping pace – in contrast to wages. Many people are saddled with loans and mortgages, and as a result, real incomes remain quite low. And the life of the average citizen consists mainly of a series of solving everyday issues that take up all his free time. Historically, our people do not think far ahead – that is, they do not think about the future for 20-30 years in relation to their savings. It seems to me that you need to live so free of accidents and emergencies, to live according to a plan in order to postpone for the future, but we are alive, and sometimes it is physically difficult to get through everything at once.

Naval K Modani

One reason not mentioned above is that many “highly educated” people have no idea as to what is needed for a comfortable retirement. I am a retired finance professor and have observed several of my faculty colleagues in humanities (Ph.D.s from good universities and been on faculty for 10-15 years or so) not start saving for retirement until they were 50 years or older. Many were two income families and thought that saving for 10 or 15 years would be more than sufficient for comfortable retirement. Unfortunately, some of them had no choice but to keep working way past their normal retirement age.

My daughter used to work in human resources for a very large IT company. She would share her experience that a large fraction of newly hired engineers and programmers and the like would decline to participate in the company 401(k) plan where the company matched dollar for dollar. They seemed to have more immediate need such as fancy new car or fancy apartment, etc. What a shame!! Lack of knowledge and foresight!!

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